Former union leaders transferred funds to enrich themselves, OPSEU suit claims

The Ontario Public Service Employees Union is accusing three former executives, including ex-leader Warren (Smokey) Thomas, of improperly using millions of dollars in cash and assets for personal enrichment.

The allegations are part of a lawsuit filed by OPSEU in a Toronto court on Monday.

The union alleges that Mr. Thomas, who served as president of OPSEU for 15 years before retiring last April, along with Eduardo Almeida, former vice-president and treasurer of OPSEU, paid themselves “significant compensation” they were not entitled to, and transferred union-owned assets such as vehicles to themselves and family members for free.

The suit accuses both men of paying out cash from the union’s strike fund to themselves and a third union executive, financial administrator Maurice Gabay, and entering into “agreements,” which ultimately enriched themselves at OPSEU’s expense.

None of the allegations have been proven in court and none of the accused have issued statements of defence.

The civil claim was filed after an investigation and audit conducted by OPSEU’s new leadership team, headed by president JP Hornick, who was elected last spring. Part of her platform was to ensure more transparency and financial accountability at the union, which represents more than 180,000 full-time and part-time public-sector workers in Ontario.

The lawsuit claims that Mr. Almeida owes the union $3-million in funds that he allegedly took; Mr. Thomas owes $1.75-million; and Mr. Gabay owes $1-million. The union is seeking an additional $6-million in damages.

Mr. Thomas and Mr. Gabay did not respond to requests for comment. Mr. Almeida could not be reached.

Members of OPSEU’s executive board first became concerned about Mr. Thomas and Mr. Almeida’s conduct when they failed to adequately disclose and account for large expenditures incurred by the union. At a meeting in December, 2021, the board discussed conducting a forensic audit of the union’s finances. By this point, Mr. Thomas had announced he was going to retire from the union and would not run for re-election.

The union proceeded to hire a third-party forensic accountant to go ahead with the audit. But in February, 2022, according to the lawsuit, the defendants (the lawsuit did not specifically name who) attempted to delay the audit until after the April, 2022, election for new leadership.

In a statement released Monday, Ms. Hornick said the union engaged the third-party forensic accountant to get a “full picture of exactly what happened.”

“I want to assure you that despite today’s news, our union remains strong and our finances stable. We will continue to act and work collaboratively with the appropriate authorities,” she added. The union’s investigation into its finances is continuing.

Mr. Thomas, a former nurse, served as OPSEU’s president for seven terms between April, 2007, and April, 2022.

Mr. Almeida was treasurer of the union for 11 years and was responsible for accounting for all the union’s finances, in addition to identifying any shortcomings in compliance related to approval of expenses. Mr. Gabay was employed by OPSEU as an accountant with the union’s financial services division. In 2015, he was promoted to administrator at the financial services division but his position was terminated in April, 2022. Mr. Gabay reported to Mr. Almeida.

Mr. Thomas, who received a salary of more than $140,000, obtained a severance payment of $60,000 upon his retirement, according to the lawsuit. Mr. Almeida was paid more than $130,000 annually and did not receive any severance, while Mr. Gabay received approximately $118,000 upon his termination (there was no mention of his salary in the lawsuit).

The lawsuit alleges that all three men misappropriated funds throughout their respective tenures at the union.

Part of the alleged misappropriation of funds involved the way in which the defendants paid themselves for vacation days, days “in lieu” of working on weekends, and home office allowances. For example, the lawsuit alleges Mr. Thomas paid himself almost $400,000 for “lieu days” that it claims he was not entitled to. Both Mr. Thomas and Mr. Almeida also allegedly gave themselves signing bonuses of close to $10,000 in 2017, which the union claims was illegitimate.

“Mr. Thomas and Mr. Almeida know or ought to have known that they were not entitled to these amounts, but abused their power and authority and breached their duties to the union by causing it to make these payments to them for their own benefit,” the lawsuit claims, adding that Mr. Gabay allegedly colluded with them to authorize the payments.

Another example mentioned in the lawsuit of how union funds were improperly handled was through the use of a union-issued credit card. Mr. Almeida allegedly incurred credit-card charges amounting to more than $1.3-million, charges that the union was not able to account for.

Mr. Thomas also allegedly transferred a number of vehicles purchased by the union to himself and his family. In July, 2019, he transferred ownership of a Dodge Grand Caravan worth $35,000 to his spouse, and two years earlier, he had transferred another vehicle, a Dodge Durango worth $65,000, to her as well. He also allegedly transferred a car to his son in 2015. None of these transfers were authorized by the union’s executive board.

The former union executives also allegedly took money from the union’s strike fund, which is used to compensate workers while they take part in labour action. Between 2014 and 2020, the three defendants withdrew a total of $670,000 in cash from the strike fund. None of these withdrawals were authorized by the executive board, the lawsuit claims. In some of the years that the withdrawals were made, there were no strikes or lockouts affecting any of OPSEU’s members or locals.

Union money was also allegedly used by Mr. Thomas and Mr. Almeida in reaching agreements between the union and themselves. For example, in March, 2022, an agreement was struck between OPSEU and Mr. Thomas to settle a harassment and discrimination complaint made by him against certain members of OPSEU’s executive board. Mr. Thomas was paid $500,000 and given a vehicle.

Allegations against Mr. Thomas, Mr. Almeida and Mr. Gabay come almost a year after former Unifor president Jerry Dias – another high-profile labour leader – allegedly received a $25,000 bribe. An internal union hearing into Mr. Dias’s conduct has yet to take place, but a police investigation of potential criminal wrongdoing was recently dropped.